In a tokenized payment transaction, a consumer provides a merchant with a token, which can represent an account that is associated with the consumer. In the case of credit and debit card transactions, the account may be issued and held by an issuer, which is typically a bank. The token may be a substitute account number that is associated with the real account number, but is not the real account number. Tokens can be limited in use and provide greater security for the payment transaction. If the token is obtained by an unauthorized person in a fraudulent manner, the real account number is not compromised.
While tokenized payment transactions are useful, a merchant that accepts a token may not be able to confirm that the token is valid. For example, a token may be expired, compromised, or invalid for a number of reasons. The merchant may be unaware that the payment token that is provided for payment is invalid until the token is submitted for authorization and authorization is subsequently denied. As a result, the merchant or issuer may incur unnecessary losses.
Another issue to be addressed is that there are many different parties in the payment ecosystem that can generate and/or transform tokens. Thus, it may be the case that entities including merchants, issuers, payment processors, third parties and the like might issue payment tokens and/or further tokenize or transform payment tokens. Because tokens are inherently unrecognizable substitutes for account numbers, it is difficult if not impossible for the party holding the payment token to determine which entity issued the token and check on its status. Further, even if the possessor of the token could determine the entities that actually issued the payment tokens that it received, it would be frustrating and difficult for the possessor to check with multiple entities as to the validity of the tokens that it receives. As noted above, tokens may be generated by issuers, payment processors, and even merchants.
Embodiments of the present invention solve these problems and other problems, individually and collectively.